Question

Berg Inc. has just paid a dividend of 2.00 and is now selling for 48 per share. Similar stocks generally earn a 12.5

1) 8.33%
2) 4.17%
3) 6.25%
4) 10.42%

Answer 1

2) 4.17%. To calculate the rate of return on the stock of Berg Inc., divide the annual dividend per share by the stock price per share.

Step-by-step explanation:

To determine the rate of return on the stock of Berg Inc., we need to calculate the dividend yield. Dividend yield is calculated by dividing the annual dividend per share by the stock price per share. In this case, the dividend is $2.00 per share and the stock price is $48. Dividend yield = 2.00/48 = 0.0417, or 4.17%. So, the correct answer is option 2) 4.17%.